Best Practices for Maximizing Profits in Day Trading Litecoin

Litecoin is one of the most popular cryptocurrencies used by brokers and day traders. There are lots of price swings and trade volume to benefit from while day trading. Also, brokers make considerable profits by day trading Litecoin.

But how does day trading work? Litecoin uses advanced open-source technology and software, which creates peer-to-peer cryptocurrency. This digital currency has experienced increasing popularity in trading over the years. Due to its increasing use, it is even called Bitcoin's little brother. 

This article will examine the top trading brokers, their history, benefits, and other details of day trading Litecoin.

What Is Litecoin?

Litecoin or LTC is a cryptocurrency developed from the fork in the Bitcoin Blockchain technology. It was initially designed to resolve the concerns of developers that Bitcoin was becoming more controlled and centralized. 

So, LTC came into being to make it difficult for large-scale mining firms to develop a monopoly in mining.

Litecoin is mined using ASIC miners. In a blockchain, a block stores the transaction data. The block is verified by the mining software and made visible to the miner. After the miner verifies it, the next block in the chain is created. Finally, the miner is rewarded with Litecoin.

You can learn more about the basics of Litecoin in this video.

History

Litecoin was developed in 2011 by Charlie Lee, a Google employee. LTC was initially a Bitcoin fork but had a few differences because Lee wanted to create a similar network with faster payments.

When LTC emerged initially, it became very popular with miners. This is because miners could mine it on their laptops and personal computers. Since it was one of the first Bitcoin forks, it seemed like an independent currency.

When the initial phases of development were over, Charlie Lee left Google and completely devoted himself to full-time Litecoin development. Apart from Lee, other developers joined the project, and the currency got its own development team.

Benefits of LiteCoin 

In the past decade, cryptocurrencies have been gaining popularity as a means of investment and transaction. One type of cryptocurrency, known as LTC or Litecoin, has become a popular choice among investors and users due to its unique benefits. 

What are these unique benefits? Let's talk about them below.

Faster Transactions

Litecoin is a decentralized global cryptocurrency, enabling faster transactions than other cryptocurrencies. It does this using a different hashing algorithm than Bitcoin, allowing more blocks to be processed per second. 

The increased block processing speed results in faster confirmations of transactions on the Litecoin network. As a result, the transaction times of Litecoin are around 2.5 minutes. 

In addition, LTC has implemented SegWit, which further improves transaction speed by reducing the size of each transaction. 

More Scalable

LTC is working on Lightning Network, which would create a second layer on top of the blockchain, allowing for near-instantaneous transactions. This would greatly help increase the number of transactions LTC can handle. 

The LTC team is constantly working on ways to improve the cryptocurrency's scalability and make it able to handle more transactions. With the right changes, LTC could become one of the most used cryptocurrencies. 

Lower Fees 

When sending or receiving LTC, the fees are generally much lower than for Bitcoin. For example, when sending $100 LTC, the fee would be about $0.01. Compare that to Bitcoin, where the fee for the same transaction would be about $1. 

So, why are the fees so much lower for LTC? Part of it has to do with the way Litecoin is mined. Unlike Bitcoin, which uses a proof-of-work system, Litecoin uses a proof-of-stake system. 

Open-Source

An aspect that makes LTC stand out is that it is an open-source platform, meaning anyone can contribute to the development of the currency. 

This is a great asset as it means that developers can work on the technology and make sure that it is constantly being improved.

Drawbacks of LiteCoin

Litecoin has recently been touted as the silver to Bitcoin's gold. However, there are several drawbacks to Litecoin that users should be aware of before investing. Let's go through some of the most prominent:

Not Widely Accepted

Litecoin, while similar to Bitcoin in many ways, is not as widely accepted by businesses. This can be attributed to a few things. For one, Litecoin is not as well-known as Bitcoin. It's only been around since 2011, whereas Bitcoin has been around since 2009. 

Secondly, Litecoin is not as valuable as Bitcoin. One Litecoin is worth about $60, whereas one Bitcoin is worth over $16,000. 

Finally, the mining process for Litecoin is different from that of Bitcoin. It takes more time and energy to mine a Litecoin than it does Bitcoin. 

Smaller Market Cap Than Bitcoin

Litecoin has been around for a while, but it has a limited supply of cryptocurrency and less market capitalization. There are a few reasons for this. 

Few major exchanges support Litecoin. This means there is less demand for Litecoin, and its price and market cap is lower.

Litecoin's block time is four times faster than Bitcoin's, so transactions are confirmed more quickly. However, this also means less time for each transaction to be verified. As a result, Litecoin is more susceptible to attacks than Bitcoin.

Complicated Mining

Litecoins are mined using a different algorithm than Bitcoins. This algorithm, known as scrypt, is designed to be more memory-intensive and, therefore, harder to mine with specialized ASICs. 

This has led to the development of two distinct camps of miners: those who mine with GPU and those who mine with CPUs. 

Centralized Foundation

Litecoin, like Bitcoin, is a decentralized cryptocurrency. However, there are a few key ways in which Litecoin is more centralized than Bitcoin.

• Litecoin's mining algorithm is not as decentralized as Bitcoin's. While anybody can mine Bitcoin using ASICs, only a select few can mine Litecoin profitably. This gives an advantage to large-scale miners with access to cheap electricity and the latest mining hardware. 
• Litecoin's development team is more centralized than Bitcoin's. Charlie Lee, the creator of Litecoin, still has a significant amount of influence over the project's direction.
• Litecoin has lower liquidity than Bitcoin and is mostly traded on a single exchange: Coinbase. This makes it more susceptible to price manipulation by whales. 
• Litecoin is relatively decentralized compared to other cryptocurrencies but is not as decentralized as Bitcoin. 

Top Litecoin Trading Brokers

Some of the best CFD brokers in the world can help you take advantage of crypto investment opportunities and enjoy large profits. They can also help you predict the future price of Litecoin. Wondering who these are? 

Let's look at the top Litecoin trading brokers:

FP Markets

FP Markets is a top-notch Litecoin trading broker that offers an extensive range of tradable assets. It gives access to assets that include Forex, CFD, and share trading accounts. FP Markets supports MT5, MT4, and IRESS platforms. 

FP Markets brokers offer a leverage of up to 500:1. You can trade 45 currency pairs with commission pricing or competitive spread. FP Markets also allows you to have demo accounts and is suitable if you are just starting with day trading Litecoin.

IC Markets

IC Markets was initially founded in Australia and is regulated by ASIC and FSA. They have had more than $646 billion in trading volume since April 2019. Their NewYork Equinix NY4 data center processes more than 500,000 trades per day.

Moreover, IC Markets is one of the best CFD brokers in the world because it is known to offer services and features for beginners and professional traders. It is also well-suited for scalpers, trading corporations, and other high-volume traders. 

So, if you are a high-volume trader, then IC markets are probably a great choice. 

FXTM

FXTM is another world-class trading broker and is short for ForexTime. It is a platform that focuses on foreign exchanges. The platform's personalized interface allows it to rise above others when it comes to Forex-focused trading tools and platforms. 

The CFDs on FXTM are available in more than fifty currency pairs, including minor, major, and exotic pairs. For the best trading practices, their leverage is up to 1000:1. You can use their demo account to practice your day trading Litecoin skills.

FXTM spreads are competitive across all platforms with 24-hour trading. Their trading sessions are open five days per week. Based in Cyprus, the broker is licensed by the International Financial Services Commission and the exchange commission.

Mining Litecoin

LTC cryptocurrency mining is a process by which new LTC are created. Miners are rewarded for their work with LTC. Mining is an essential and integral part of the LTC ecosystem.

LTC mining is a computationally intensive process that requires substantial computer resources. So, it is not suitable for everyone. Those who do choose to mine LTC must be prepared to invest in powerful hardware and pay for electricity costs.

The most important thing to keep in mind when you are mining is that, unlike other cryptocurrencies, Litecoin does not use proof-of-work (PoW) as its consensus algorithm. Instead, it uses proof-of-stake (PoS) as its consensus algorithm. 

PoS means you don't need specialized hardware like dedicated ASICs or GPUs to mine Litecoin. However, you do need two things: the software and hardware required for mining. 

Since Litecoin uses a scrypt hashing algorithm for mining, it can be mined using standard commodity hardware, such as GPUs. To start mining Litecoin, you will need a computer with a powerful GPU. You will also need to download the appropriate mining software for your operating system.

Once you have installed the software, you will need to be a part of a mining pool. This will allow you to share your resources with other miners. Ultimately, it will lead to increasing your chances of finding a block. 

After joining the pool, you will need to configure your miner. 

The most important setting is the address of your Litecoin wallet. It is your legitimate payment method, and it is where your rewards for finding blocks will be sent. You can use a mining calculator to know how many rewards you have accumulated in your wallet.

How to Buy and Store Litecoin

When buying Litecoin, you will need to create a wallet to store your coins. You can download a Litecoin wallet from the official Litecoin website. 

After installing the wallet, you'll have to generate a private key. This key will be used to access your wallet and send Litecoins.

Once you have a wallet, you can purchase Litecoins from exchanges like Coinbase or Bitstamp. Keeping your Litecoins in a secure location, such as a hardware wallet or paper wallet, is essential.

Let's look at different wallets and how they can be used to buy and store Litecoin.

Hardware Wallets

A hardware wallet is a physical, electronic device that stores your private keys in a secure location. These wallets are the most secure way to store your Litecoins because they cannot be hacked as online wallets can. 

To use a hardware wallet, you will need to purchase one from a reputable seller. Once you have your hardware wallet, you can use it to buy and store Litecoins.

Hardware wallets are an important tool for Litecoin investors. They provide security and peace of mind, knowing that their private keys are safe and sound. 

When buying Litecoins, always make sure to purchase them from a reputable source, such as an exchange or directly from another investor. Once you have your Litecoins, transfer them into your hardware wallet for safekeeping.

Desktop Wallets

Desktop wallets are another hot wallet to store Litecoins. The choice for desktop wallets stems from the high degree of security they offer while also still being relatively easy to use. 

Many different desktop wallets are available, each with its advantages and disadvantages. Two of the most popular are Electrum and Exodus.

Electrum is an excellent desktop wallet for beginners. It's easy to use and offers a 12-word security passphrase, which should be enough to keep your Litecoins safe.

KeepKey is a hardware wallet that offers a high level of security. It's one of the most expensive options available but also one of the safest. KeepKey works on multiple platforms, including Windows, macOS, and Linux. 

Mobile Wallets

Mobile wallets are one of the most popular ways to store Litecoin. They offer users a high degree of security and convenience. 

There are many different mobile wallets available for Litecoin, each with its own unique features. Some of the most popular include Jaxx, LoafWallet, and Coinomi.

To use a mobile wallet to buy Litecoin, simply create a retail account on the exchange of your choice and deposit funds into your account. Once you have funds in your account, you can use your mobile wallet to purchase Litecoin.

Paper Wallets

A paper wallet is simply a physical copy of your Bitcoin public and private keys. It is important to generate your paper wallet offline, ensuring that hackers cannot access your keys.

To generate a paper wallet, you can use a service like Bitaddress.org. Once you have generated your keys, you will need to print them out on a piece of paper. You can then store this paper wallet in a safe place, such as a fireproof safe.

To use your paper wallet, scan the QR code of your public key and send Litecoins to that address. To spend those coins, you will need to import the private key into a Litecoin wallet.

Litecoin Day Trading Tips

Did you know that around 80% of day traders stop trading within the first two years? Why? Because they employ the wrong strategies to achieve profit. So, what are the right strategies to increase profit?

Let's look at some of the best strategies you can embrace for day trading Litecoin: 

Daily Chart Consolidation

By consolidating your charts, you can better understand the market. Also, you can make more informed decisions through chart consolidation.

There are a few essential things to keep in mind when consolidating your charts and to figure out the consolidation price. 

First, you'll want to make sure you're looking at the right intraday time frame. This will vary depending on your goals and the type of Litecoin day trader you are. 

If you're looking to make short-term trades, you'll want to look at shorter time frames, while if you're interested in long-term investments, you'll want to look at longer time frames. In this way, day trading Litecoin can be more profitable in different time frames. 

Second, for accurate long-term profit, you'll want to focus on key indicators when day trading Litecoin. These will help you identify trends and make better decisions about when to buy and sell. 

Some popular indicators include moving averages, support and resistance levels, break of resistance, and candlestick patterns.

Be Patient

Many aspiring day traders can't wait to get in on the action and start making money from Litecoin's price movements. However, it is important to be patient while day trading Litecoin.

Several things can affect Litecoin's price, such as news announcements and changes in the market. It is essential to wait for these things to happen so that you can make informed decisions during day trading Litecoin.

Another thing to remember is that Litecoin's price can be volatile. This means when you are day trading Litecoin, the price can fluctuate a lot in a short period. This can be good for day trading Litecoin and traders looking to make quick profits, but it can also be risky. 

Have a Strong Exit Plan

Day trading Litecoin can be profitable, but only if you have a strong exit plan. Many investors get caught up in the excitement of the trade and forget to set a stop-loss or take-profit order. This can lead to considerable losses if the market moves against them.

It's important to have a solid plan for getting out of a trade before you enter it when day trading Litecoin. Decide your profit target and where you'll exit if the trade goes against you. This will help you lock in profits and limit losses.

Remember, Litecoin is a volatile cryptocurrency, and prices can move quickly. Always remember there is no definite or expected price for day trading Litecoin. That's why having a well-thought-out exit plan is crucial before starting day trading Litecoin.

Get Educated

When day trading Litecoin, you will need to have a good understanding of the market and the coin itself. Here are a few useful tips to help you get started:

• Do Your Research – Make sure you understand what LTC is and how it works before you start day trading Litecoin.
• Start Small – Don't risk too much money when you first start day trading Litecoin. You can always invest more as you become more familiar with the market.
• Use a Reputable Exchange – There are many different exchanges available for day trading Litecoin, so make sure you choose one that's trustworthy and has low fees. 

Conclusion

Day trading Litecoin can be a profitable financial alternative for those who are willing to invest the time and effort required to become informed and make sound decisions. However, it is important to remember that day trading entails significant risks and should not be undertaken carelessly. Before you start day trading Litecoin or any other cryptocurrency, you must first understand technical analysis, risk management, and market psychology. Although the future of Litecoin (and cryptocurrencies in general) is not certain, day trading can provide opportunities for those prepared to take the risk.